Application of the Benchmarks Regulation to Consumer Credit Agreements regulated by the Mortgage Credit Directive 2014
The Benchmarks Regulation 2016/1011 came into force in January 2018. It is an EU regulation on indices used as benchmarks. Among other things, it covers an index which is used to determine the applicable interest rate and the amount payable under consumer credit agreements as defined in the Consumer Credit Directive 2008/48 and Mortgage Credit Directive 2014.
The Benchmarks Regulation applies to mortgage credit agreements issued by Allied Irish Banks, p.l.c and AIB Mortgage Bank which reference an interest rate which is based on a benchmark. Details of the interest rates provided by Allied Irish Banks, p.l.c and AIB Mortgage Bank which use benchmarks and its administrators are set out in the table below.
Interest Rate |
ECB Tracker Rate |
Benchmark |
European Central Bank Base Rate |
Administrator of Benchmark |
The Governing Council of the European Central Bank |
Interest Rate |
Euribor |
Benchmark |
The Euro Interbank Offered Rate |
Administrator of Benchmark |
European Money Markets Institute |
Potential implications for you where your credit agreement references a benchmark
The Benchmarks Regulation requires us to have a written plan in place and to implement that plan should the benchmark referenced in your mortgage credit agreement materially change or cease to be provided. We will comply with the plan in our engagement with you under your mortgage credit agreement, unless we have a good reason for not implementing the plan (such as a legislative change or other binding legal obligation).
Should the benchmark used in your mortgage credit agreement materially change or cease to be provided, we will substitute an alternative benchmark if this is both feasible and appropriate at that time. Otherwise, we will look to find a solution that is transparent and that fairly balances your best interests with ours.
We will then write to you to inform you what we have done to address the issue and the effect this will have on your credit agreement, including changes (if any) to:
- the interest rate applicable to your mortgage credit agreement;
- your repayment amounts; or
- the term of your mortgage credit agreement.
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